Understanding Indonesia's VAT Rate Increase Policy

VAT Rate

The Indonesian government is set to raise the Value Added Tax (VAT) from 11 percent to 12 percent by 2025. This increase is in line with the mandate of Law No. 7/2021 on Tax Regulation Harmonization. However, amidst the resurgence of global inflation risks and the potential for the high-interest-rate regime to persist longer, some parties are urging the government to postpone the implementation of this regulation.

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